Soldato
Trading the stockmarket (NO Referrals)
- Thread starter mcast123
- Start date
Yeah this has driven me nuts for a while. I wish they'd lift the threshold though.
Dropping the CGT threshold is painful also. This must be the most un-conservative conservative government ever.
Soldato
Personally, I’m not too bothered about the thresholds at the moment.
We can put 20k into ISAs, 40k into Pensions a year, and a lifetime allowance of 50k into premium bonds and about 10k in to personal saving, with interest rates of ~5% if your higher tax payer, or 20k if your basic tax payer in a lifetime. That’s a lot of ways to be tax efficient.
6k for capital gains tax per year, so unless you have a property or a few that is bringing you over £500 a month.. in which case imho its time to setup a LTD.. it’s not going to effect many people.
Personally I would like to see the tax brackets raised with inflation/cost of living.
It's actually 60K a year for pension contributions now: https://www.gov.uk/government/publications/rates-and-allowances-pension-schemes/pension-schemes-rates#:~:text=There's no limit on the,of your UK taxable earnings
On an entirely selfish note, I'd really like a higher ISA allowance as I'm working hard to bridge the gap between retiring a little early and being able to drawdown my private pensions. I could shove more into the pension but I'm getting close to my target amount and to be honest I've seen an alarming number of people drop dead before retirement so that's prodding at me in the back of my mind.
Definitely agreed that the fiscal drag via frozen tax brackets is a really scummy policy and I wish they'd adjust those for everyone's sake.
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Soldato
I save up the 20k isa allowance during the year then dump it in the day it resets. Seems ridiculous to have to deal with tax on savings interest in this scenario.
(Premium bonds already maxed ofc.)
And the 40% income tax threshold is a joke, needs raising to about £100k. I look around at the neighbouring houses and wonder if I'm paying more tax than all of them combined.
(Premium bonds already maxed ofc.)
And the 40% income tax threshold is a joke, needs raising to about £100k. I look around at the neighbouring houses and wonder if I'm paying more tax than all of them combined.
Soldato
I was bored last night, so I sat there and worked out all the ways (I think) to be tax efficient without having to setup a trust fund, have off shore accounts etc.
Anything above £50,270 goes to the pension(s)
£50,270 after tax and NI., £38,206 remaining
£38,206 - 20k goes into ISAs, £18,206 remaining
£18,206 + £1,000 interest from savings is £19,206
£19,206 + £1,000 from dividends is £20,206
£20,206 + £3,000 (current 6k but changing) from capital gains is £23,206
£23,206 + £1,000 from trading/part-time work/property allowance is £24,206
£24,206 + £1,875 from premium bonds winnings, 3.75% mean avg return of £50,000, gives £26,081
£26,081 is £2,173 per month, I think I can live of that if I don't have to pay for the mortgage.
The hard part is setting up the accounts so this happens... lol
Please tell me if miss of any tax free incomes..
Anything above £50,270 goes to the pension(s)
£50,270 after tax and NI., £38,206 remaining
£38,206 - 20k goes into ISAs, £18,206 remaining
£18,206 + £1,000 interest from savings is £19,206
£19,206 + £1,000 from dividends is £20,206
£20,206 + £3,000 (current 6k but changing) from capital gains is £23,206
£23,206 + £1,000 from trading/part-time work/property allowance is £24,206
£24,206 + £1,875 from premium bonds winnings, 3.75% mean avg return of £50,000, gives £26,081
£26,081 is £2,173 per month, I think I can live of that if I don't have to pay for the mortgage.
The hard part is setting up the accounts so this happens... lol
Please tell me if miss of any tax free incomes..
Soldato
Same. It’s well overdue being increased. Need to build that bridge.It's actually 60K a year for pension contributions now: https://www.gov.uk/government/publications/rates-and-allowances-pension-schemes/pension-schemes-rates#:~:text=There's no limit on the,of your UK taxable earnings
On an entirely selfish note, I'd really like a higher ISA allowance as I'm working hard to bridge the gap between retiring a little early and being able to drawdown my private pensions. I could shove more into the pension but I'm getting close to my target amount and to be honest I've seen an alarming number of people drop dead before retirement so that's prodding at me in the back of my mind.
Definitely agreed that the fiscal drag via frozen tax brackets is a really scummy policy and I wish they'd adjust those for everyone's sake.
So just to stop me making a mistake - after reading a lot here, I want to put some money, in a S&S ISA, to simply track the S&P 500 (I have other managed/company pensions - this is just an amount I have in a private pension).
Am I just looking for an ETF, or something else ? Does it matter much 'which' one I choose - there seem to be a lot.
I understand that nothing here is financial advice. I have an account with AJBell, and don't wish to change that at the moment, but would like to simplify the holdings into a single 'tracker'.
Am I just looking for an ETF, or something else ? Does it matter much 'which' one I choose - there seem to be a lot.
I understand that nothing here is financial advice. I have an account with AJBell, and don't wish to change that at the moment, but would like to simplify the holdings into a single 'tracker'.
Soldato
ETF works great. I prefer ones that hold the physical securities like Vanguard ones (most do but not all, some are synthetic). Then you choose between distribution or accumulation. Ones that distribute put the cash from dividends into your account for you to invest or do what you want and accumulation will automatically reinvest.
Thanks. I would be choosing accumulation. I will see if there's an easy way to determins which hold the securities (or not). Beyond that, I presume it's mostly looking at 'fees' as they should all trend the same way ?
Soldato
Fees are usually low with these funds as they are passive but definitely something to check you are getting the best price on. It’s also worth checking the amount of money invested in the fund (total assets). Less of an issue on a fund that’s been around while or in an established provider but new funds or funds with less established providers may be a less liquid.
I was bored last night, so I sat there and worked out all the ways (I think) to be tax efficient without having to setup a trust fund, have off shore accounts etc.
Anything above £50,270 goes to the pension(s)
£50,270 after tax and NI., £38,206 remaining
£38,206 - 20k goes into ISAs, £18,206 remaining
£18,206 + £1,000 interest from savings is £19,206
£19,206 + £1,000 from dividends is £20,206
£20,206 + £3,000 (current 6k but changing) from capital gains is £23,206
£23,206 + £1,000 from trading/part-time work/property allowance is £24,206
£24,206 + £1,875 from premium bonds winnings, 3.75% mean avg return of £50,000, gives £26,081
£26,081 is £2,173 per month, I think I can live of that if I don't have to pay for the mortgage.
The hard part is setting up the accounts so this happens... lol
Please tell me if miss of any tax free incomes..
If I was a lot over 50k I sure wouldn't put it all into pension! I'm too scared of not seeing it for that.
On the contrary, they love hitting the less well off and rewarding the rich (which is what this does, in combination with their other policies).
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From what I read, there's not really any difference between buying the index fund or the ETF through Vanguard if you're long-term? ETFs let you trade during the day though if you're glued to a ticker?
Soldato
From what I read, there's not really any difference between buying the index fund or the ETF through Vanguard if you're long-term? ETFs let you trade during the day though if you're glued to a ticker?
As far as I know, there are only two types of index funds...
Mutual index funds, ran by a mutual fund company who has purchased a load of shares for each of the companys in the index and bundle them together as a fund.
They are only priced at the end of each day trading and buying and selling occurs between the customers of that mutal fund. Mutual fund companies can offer special bundles of shares, i.e. top 50 tech companys in the US with the top 20 from the rest of the world etc..
ETF are platform based, i.e T212, Vangaurd etc so likely to have more customers, the prices for them changes as often as the exchange updates it.
index funds can be balanced different, some are weighted so the biggest companys make up the most shares in the bundle and some are balanced equally, i.e. 500 pounds buys 1 pound worth of shares for each of the 500 companies in the S&P 500.
It's worth having a quick scan of the fund to see how it's made up and the balancing of it.. but they are all very similar, it's not like one etf will offer a different bundle of shares that the rest won't..
Ah, yes. You're absolutely right - for example, there's a lot of overlap between S&P 500 UCITS ETF and U.S. Equity Index Fund. The weightings are slightly different for the bigger companies due to the broader market exposure of the latter but it's not a massive difference.
Soldato
Yeah very little difference. I would be happy with either. You tend to get lower fees with ETFs. It’s marginal but it adds up with big sums over long periods.From what I read, there's not really any difference between buying the index fund or the ETF through Vanguard if you're long-term? ETFs let you trade during the day though if you're glued to a ticker?
Soldato
depending on the supplier; be it a mutal or platform, there are some strange catch 22s to look out for;
some don't allow fractual shares, some don't allow autoinvest; if you are doing via dollar/pound cost avg/monthly direct debts or getting dividends... some allow you to transfer ETFs to index and vice versa, some won't... there is a small cost difference between the two, and some will charge more if you wanted to buy the index fund now rather than wait for a certain time/day..
It's basically like going to subway and asking for a chicken teriyaki, at the end of the day it's a chicken teriyaki but when you ask for jalapenos.. that particular subway may be a tad tight on the amount it gives you... lol
some don't allow fractual shares, some don't allow autoinvest; if you are doing via dollar/pound cost avg/monthly direct debts or getting dividends... some allow you to transfer ETFs to index and vice versa, some won't... there is a small cost difference between the two, and some will charge more if you wanted to buy the index fund now rather than wait for a certain time/day..
It's basically like going to subway and asking for a chicken teriyaki, at the end of the day it's a chicken teriyaki but when you ask for jalapenos.. that particular subway may be a tad tight on the amount it gives you... lol
Soldato
Technically nothing stopping you doing that on an index fund but it will sit there until the one time it trades that day.